French lawmakers have adopted plans that would require crypto companies in the country to seek authorization from regulators to operate if they are not already registered with the country’s financial regulator by Jan. 1, 2024. This new plan offers more time than a previous proposal by the Senate, which had suggested a cut-off date of October 2023. The move is in preparation for new European Union rules known as the Markets in Crypto Assets (MiCA) regulation, which aims to prevent crypto companies from abusing these new laws.
According to Daniel Labaronne, who is holding the pen on the new legislation on behalf of the Assembly’s Finance Committee, the January 1, 2024 date has been chosen to give new entrants more time to ask for their authorization, which is complicated, as well as offering more time to the Financial Markets Authority to process applications. He also stated that without the amendment proposed by him, there would be a “risk of having operators just registering to benefit from the grandfather clause” set out under MiCA, which means they wouldn’t have to gain a full license until around March 2026.
The French crypto industry has expressed concern over the proposals, arguing that they could damage France’s goal of becoming a crypto hub. The proposed legislation must now be approved by the Assembly next week and negotiated with the Senate. The tight laws have been proposed following the collapse of crypto exchange FTX. Existing French law allows companies to undergo the lighter process of registering, rather than seeking authorization, which requires a fuller series of checks on financial resources and business conduct.
This news is likely to be met with mixed reactions from the crypto industry. Some companies may see this as a step forward in creating a more regulated and secure environment for crypto businesses, while others may view this as a hindrance to innovation and growth. It remains to be seen how the French crypto industry will adapt to these new regulations and whether it will be able to maintain its goal of becoming a crypto hub.